I welcome the new States Assembly to their first 200 days plus in the job. Trust me I know how difficult a job it is. However, in my humble opinion, some of them need to wake up and smell the coffee, or perhaps the stench of fermenting manifestos.
Just like a former treasury minister who expressed his surprise at his complete agreement with a Press opinion penned by Horace Camp, I too hung on every word.
‘You cannot campaign as a brake and then govern as an accelerator’. ‘If the States wants people to trust it with more money it must earn that trust... not with speeches or glossy documents but with behaviour’.
‘We either allow politics to become a place where promises expire the moment the ballot boxes are emptied or we remind people that words said to voters still matter after the election.’ Wonderful stuff, hear, hear.
The politics of opposition, blame and challenge are far easier than the politics of fixing those issues. Nobody wants higher taxation, everyone wants excellent public services, especially the very expensive ones – healthcare, education and safety and security. It is perfectly understandable that the good people of Guernsey baulk at GST and robustly question how their money is spent or is wasted, and importantly where the attempts to reduce that spending are.
Many pages in that wonderful glossy election booklet posed those challenges in spades but have failed miserably to come up with the silver bullets to find the solutions. Some enthusiastically echoed popular social media rants but again failed to give credible remedies to those ills. Instead at the very first real test, the Assembly accepted a P&R budget bigger than the year before with not a shred of real saving initiatives. Where and when are those promises to be delivered, as boldly laid out in carefully crafted popularist manifestos. Just like tax increases, substantial cuts in services won’t go down well on their preferred media platform sites and were not prominent at hustings. Where are the solutions? You are in government now.
We are now told that the deficit is £98m. P&R’s immediate response is to move from a rule based fiscal framework to one of ‘principle’, to provide more ‘flexibility’. I suggest that is because P&R realises that they will need to borrow their way out of our fiscal mess, and heavily. Also, not sure I read that in many manifestos.
And again, I find myself violently agreeing with last week's Press comment: Options narrowing on tax. Indeed, the infamous so called zero-10 is a factor in the neatly described ‘eroded black hole’ and ‘bigger black hole’. Some manifestos threw out beguiling lifelines around corporation tax, Pillar II and territorial tax. But it is now suggested ‘that’s all blowing up in people’s faces’ as the alternatives seem to offer no magic beans. The sums raised apparently do not do it and some arrangements, even more worryingly, pose risks to our precious finance industry.
So that returns us to the unpopular GST-plus package. One factor in the zero-10 conundrum is, that unlike the Isle of Man and Jersey when it was introduced, back in 2009, they had (or already had) a GST. The IoM in fact collects £1bn in consumption tax in three years and Jersey the same in under nine years. This means they have in that time collected many hundreds of millions that Guernsey has not. Would we be in a £98m. deficit if we had followed suit, and would our crumbling infrastructure be in such a mess?
What’s more, this gives our Crown Dependency cousins much more wriggle room when it comes to globally competitive tax arrangements, especially as we have an agreement with them to work in lock step as part of the international Pillar II initiatives.
So, I look forward to the very overdue fiscal policy debate with trepidation.
What is certain, however, is members cannot now think of raising revenue whether on consumption, income or corporate tax, unless spending is measurably and robustly controlled in tandem. Currently islanders simply do not have the trust in the States to do this. As one current deputy has already sagely suggested, perhaps some now need to concentrate on doing their job rather than keeping their job.
